The new tool called “Fraud Detection” identifies over 50 of the most prevalent payment fraud scenarios faced by banks and other institutions. It flags up fraud typologies such as Account Take over (ATO), Authorised Push Payment Fraud (APP), Synthetic Identity, and Relationship Fraud.

In addition, the tool can identify “unknown unknowns” – fraud typologies that do not match current rule-based scenarios. Businesses then receive an alert to suspicious activity with a full explanation.

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Oliver Furniss, chief product officer at ComplyAdvantage, said: “Fraudsters are fast and creative, always looking for new vulnerabilities they can exploit. That’s why fraud is one of the most commonly experienced crimes affecting people every day, causing billions in losses to consumers and businesses

“Banks and other financial institutions are constantly playing catch-up. Fraud Detection gives them an effective new way to monitor the millions of transactions they process every day and stop criminal activity in its tracks”, Furniss added.

AI and the issue of fraud

AI tools play an increasingly important role in combating fraud in retail banking, with GlobalData analysts expecting the overall AI market value to reach $383.3bn in 2023.

Raffael Maio, chief strategy officer at Swiss fintech NetGuardians, told RBI that the primary challenge in retail banking is the “sheer volume of transactions”, which usually ranges from hundreds of thousands to millions daily.

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“Traditional fraud prevention techniques like rules-based systems describing the modus operandi are no longer effective”, Maio said. “Instead, by leveraging AI/ML models, we can adopt a more risk-based approach and learn from every client.”

Holvi is a digital banking service for small businesses which uses CA’s new tool. Its head of AML and AFC Operations, Valentina Butera, said that the decision to adopt Fraud Detection follows the recent advent of fraud technologies.

“Our Fraud Detection solution helps payment providers, banks and other institutions provide a strong first line of defence, protecting their customers and alleviating the stress and loss criminals cause”, Butera noted.